Feb 28 (Reuters) - Barnes & Noble Inc reported a net
loss for the holiday quarter, hurt by a sharp decline in sales
in its Nook device and e-books business, at a time that Chairman
Leonard Riggio is trying to buy the company's profitable
bookstore unit.

The company said earlier this week that Riggio plans to make
an offer for the main bookstore business, but not its Nook and
e-book business and its college bookstores.

Revenue at its Nook business, including e-books and devices,
fell 25.9 percent to $316 million in the fiscal third quarter
that ended Jan. 26, as it sold fewer e-readers and tablets and
had to cut prices, losing ground to big-pocketed tech rivals..

"It simply doesn't have the assets to make its tablet a
useful productivity tool the way Apple and Google do," Forrester
Research analyst James McQuivey said in a note.

Last year Barnes & Noble carved out Nook and its college
bookstore business into a new unit called Nook Media. That has
attracted investments from Microsoft Corp and Pearson
LLC, but Barnes & Noble still owns 78 percent.

Barnes & Noble's weak quarter raised the odds of a deal that
would divide the company, and shares finished the day up 3.3
percent.

"Barnes & Noble stands at a fork in the road and rather than
choose one path, it will likely need to split into two
companies," McQuivey said.

The loss on the Nook business more than doubled to $190.4
million and the disastrous holiday performance puts additional
pressure to quickly find other investors for Nook.

Despite Nook's problems, Barnes & Noble Chief Executive
William Lynch said the company "remains committed" to the Nook
devices.

Digital content sales rose 7 percent in the holiday quarter
even though Nook device sales fell, and Barnes & Noble is in
discussions for partnerships to sell the digital content it
owns, he said.

Barnes & Noble, the largest U.S. bookstore chain, launched
the first iteration of the Nook e-reader in 2009. At first the
device was a hit, winning the retailer as much as 27 percent of
the U.S. e-books market.

But more recently, the tablet version of Nook has struggled
against rival devices from Amazon.com Inc and Google
Inc, which offer far more apps and content and have
improved their e-reading functions.

Barnes & Noble said that at its namesake book superstores,
sales at stores open at least 15 months, excluding Nook
products, slipped 2.2 percent in the latest quarter.

At its college bookstores, same-store sales fell 5.2
percent.

The company posted a net loss of $6.1 million, or 18 cents
per share, compared with a profit of $52 million, or 71 cents, a
year earlier.

Revenue was down 10.3 percent to $2.23 billion, below the
$2.4 billion Wall Street was projecting, according to Thomson
Reuters I/B/E/S.